Merchant account and payment gateway solutions specifically dedicated to supplement & nutraceutical retailers.
Millennials are more health-conscious than the previous generation and are increasingly willing to pay for products that will help them achieve their health goals. Also, let’s face it. We all love shortcuts and when there’s a supplement that appears to be a panacea for all things health-related, it’s not hard to see why it’s so tempting.
For a merchant in this industry, there couldn’t be a better time to scale. There’s just one problem though. How will you tap into the burgeoning online market for health supplements when banks consider it to be a high-risk industry? Most reputed banks steer clear of merchants who sell Nutraceuticals and Weight Loss products. In fact, finding a merchant account with favourable terms and low transaction rates in this vertical can be arduous.
That’s where we step into the picture. At Merchant Advise, we work with clients in high risk industries like this to ensure they get the most competitive rates in the market.
Despite the staggering advances in nutritional science, bulk of the dietary supplements sold online are either useless or worse, hazardous to health.
There are no binding regulations on the type of supplements that can be sold online either, which has created an industry with a poor reputation.
Reputational Risk – Many big-ticket banks are conservative about the kinds of merchants that they want to be associated with. A bank’s brand identity is built on its corporate social responsibility – how it conducts itself in society. These are crucial advertising dollars that banks are simply unwilling to compromise on. With a reputation that borders on shady, it’s no surprise that some banks prefer to avoid the vertical entirely rather than risk their brand reputation.
Chargebacks – As an additional motivation for a potential customer, and as a badge of trust in their product’s effectiveness, a lot of merchants offer a ‘Money Back Guarantee’. Some customers view this as a window of opportunity to cancel the transaction due to reasons beyond the product’s quality. Buyer’s remorse for instance. It’s not unusual for dissatisfied customers to chargeback transactions citing reasons such as ‘poor quality’, ‘didn’t match description’ and so on. Whereas in reality, results with dietary supplements are highly subjective.
Unethical Practices – Dietary supplements have spawned many horror stories. There’s a reason why governmental organizations and food regulatory bodies are constantly scrutinizing this space. It is estimated that only 13% of the US retail market for dietary supplements is compliant with Food and Drug Administration (FDA). Many unscrupulous merchants have been caught spiking products with illegal ingredients, mislabelling their contents and levying recurrent charges on unsuspecting customers. These few bad apples have painted the entire space with the same brush.
Merchant Bankruptcy – It’s not uncommon for companies in the Nutraceuticals industry to shut shop overnight. In the event of a shutdown, it is difficult to recover any lost funds from these merchants so banks have little incentive to do business with them.
A Nutraceuticals business needs a versatile payment partner that can process straight sales, subscription boxes (for diets and meals), and Free Trial Offers with recurrent subscriptions, with the buyer’s prior consent.
One that understands the jargon and the technicalities of this domain, and can help you navigate the common pitfalls that the industry is plagued with. Top Notch Chargeback protection and reasonable rates on transactions are non-discountable features.
But the last thing you need, is to go through a tedious application and onboarding process, to discover that the account was shut down abruptly with no intimation.
The fact is that most banks will turn down applications or terminate accounts, even with flawless transaction histories and credit scores. That’s because not every bank has an appetite for high-risk verticals like these.
With an astute understanding of the diverse categories, complex compliance norms, multiple payment processing models and SIC & NAIC codes, Merchant Advise can assist you in securing a nutraceutical merchant account with the right bank in minimal time.
If you are applying for a merchant account to every payment processor that you find on Google, it’s a waste of time and resources.
We will help you find the right bank and the right processor for your business. We work with skilled and experienced underwriters in the Nutraceutical industry who analyse risk and save time, both at the application stage as well as during new account setups, making it straightforward and simple.
Regardless of whether you seek a merchant account for straight sales, or for subscription boxes, we have the expertise to find you a reliable merchant account that processes multiple currencies, protects you against fraud, offers chargeback protection, and allows you to accept multiple payment modes online, on the phone, email, fax, MOTO and in person.
The application process for getting a high-risk merchant account is short and straightforward. Here’s are some of the essential documents that you will require while applying:
We have worked with businesses in a variety of sub-categories in the nutraceutical industry. These include dietary supplements, herbal or other botanical extracts, cosmeceuticals, functional foods and sexual enhancement products.
We have extensive experience in the Nutraceuticals industry, and work with a network of processors who have the capability to offer merchant accounts for businesses in this space. We analyse every business on its own merit, and identify the right bank with the correct processor for your business.
Sometimes, we recommend that you work with multiple processors, because of the dynamic and finicky nature of the business. For instance, we may recommend a domestic and an offshore merchant account to ensure uninterrupted processing. We also have experience in securing merchant accounts for multicurrency businesses, ensuring that you can accept payments from all over the world without any hassles.
As described earlier, there are several factors that could lead your Nutraceutical business to be considered high risk. But here are the primary ones.
High Chargeback Ratios – The Health Supplements Industry has always been plagued with high Chargeback Ratios.
Lack of Regulations – The lack of regulations make the industry the Wild West of the payment processing world.
Strict Compliance Monitoring – The industry is very strictly monitored for compliance, and a violation could lead to heavy fines.
That depends on a multitude of factors. Apart from the usual ones like stable finances, a reasonably good transaction history and a good credit score, some banks use a checklist to screen applications. Some of the points they consider in this vertical are
Having said that, the best way to increase your chance of approval is to get in touch with us. We will analyse the application and connect you to banks with the highest chances of approval.
We understand the importance of having a stable merchant account, and the risk associated with termination. We work with processors who don’t have an aggressive churn policy, but some of them do reserve the right to terminate accounts. This is standard in the industry, and there are very few processors who don’t have this clause.
But be rest assured that we strive to help you secure a merchant account where the chances of termination are least.